S&P 500; US Indexes Fundamental Daily Forecast – Zuckerberg’s Testimony, Trump’s Attack on Amazon, Key Stories to Watch

The major U.S. equity indexes finished higher on Thursday, the last trading day of the week, month and quarter, and ahead of the long Easter-holiday weekend.  Volume was below average with many of the major players on the sidelines, allowing a few large pools of buyers to manipulate the price action.

In the cash market, the benchmark S&P 500 Index settled at 2640.87, up 35.87 or 1.36%. The blue chip Dow Jones Industrial Average finished at 24103.11, up 254.69 or 1.06% and the tech-based NASDAQ Composite closed at 7067.84, up 118.61 or +1.68%.

The Dow was supported by a 5-percent jump in shares of Intel. The S&P 500 Index was boosted by a 2.2 percent rally in the tech sector. The NASDAQ Composite was driven higher by strong recoveries in shares of Facebook which rose 4.4 percent, Apple, Netflix and Alphabet. Microsoft rose 2.1 percent after the company announced a major reorganization.

Forecast

Despite the rally on Thursday, there is still a lot of uncertainty in the market. Elevated volatility levels suggest fear may be driving the price action. At the start of the year, the fear of missing the rally drove investors to buy overpriced stocks. In February and March, the fear of getting caught on the wrong side of the market may be driving investors to take quick profits on rallies and breaks. This is helping to produce a rangebound, two-sided trade.

The volatility is likely to continue next week with the testimony before Congress on Tuesday by Facebook creator Mark Zuckerberg. Recently a data breach has fueled a huge liquidation in shares of Facebook that has taken the NASDAQ index with it.

Investors now fear that the Facebook incident will bring additional laws to the social media sector including companies like Twitter and Google. This may encourage further selling in the tech sector next week.

Late in the week, President Trump took on Amazon.com, tweeting, “Unlike other, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”

Amazon’s stock initially fell in reaction to the tweet, however, it was able to recover some of the loss on Thursday.

Next week, the price action in the tech sector will control most of the price action in the major stock indexes.